Ikea Malaysia keeps prices steady despite global cost pressures

KUALA LUMPUR: Ikea Malaysia is holding prices steady despite rising global cost pressures and is also brushing off competition from online marketplaces, betting on quality and affordability to sustain demand.

Country retail director Malcolm Pruys said the company has no plans to raise prices, even as geopolitical uncertainties and supply chain disruptions push up logistics costs globally.

Instead, Ikea’s long-term strategy is to gradually lower prices where possible, he told the Business Times.

“We have no intention to lift prices on our products at all. Our customers should not be paying for what is going on half a world away today. That is our view. We want to be affordable and give the best possible here we can,” he said.

Pruys said the long-term implications remain uncertain but noted that Ikea Malaysia has a sufficiently large and resilient supply chain to navigate current challenges.

“I would say that we have a big enough and robust enough supply chain. We buy a lot of raw material in advance. Our suppliers buy a lot of raw material in advance. We have really, really good supply chains.

“We have a warehouse here in Malaysia that is supplying big parts of Asia. We already have a lot of products that are sitting there. I think that we can weather this for quite some time,” he said.

Pruys said that while the company would have to respond if wholesale prices were to surge sharply, such as a 25 per cent increase, this is not the current scenario.

He said Ikea Malaysia is only seeing minor cost increases in isolated areas, which have not materially impacted the business so far.

Pruys said the company also has no plans to increase prices in its food segment, which includes its popular meatballs and curry puffs.

Meanwhile, Pruys said while low-cost online platforms such as Temu and Shopee have gained traction, Ikea Malaysia is not looking to compete purely on price.

“If you want a very cheap product, there are platforms for that. But we focus on quality, design, sustainability and long-term value,” he said.

He added that Ikea Malaysia’s key differentiator lies in its end-to-end offering, including product guarantees, safety certifications and transparent sourcing.

“You may find lower prices online, but you will not get a 10-year guarantee or the same level of assurance on quality and safety,” he said.

Pruys said issues such as unclear product origins, lack of certification and limited after-sales accountability remain concerns for consumers buying from marketplace sellers.

Despite the rise of e-commerce, he said physical stores continue to play a critical role, particularly for larger purchases.

“Customers still want to see, touch and try products like sofas, kitchens and mattresses before making a decision,” he said.

Online sales currently account for about 15 to 16 per cent of Ikea Malaysia’s business and have remained relatively stable in recent years.

However, the Swedish-based company has seen a slight uptick in online purchases in recent weeks, partly driven by increased work-from-home arrangements.

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المصدر: New Straits Times